Regional performance

Finding 7: European asset managers lead the way on responsible investment compared to their North American or Asia Pacific peers.

All the firms in the top 10 were from the EU or UK, and only six of 39 European asset managers received a grade of D or E. In contrast, more than half of non-European managers (13 of 25 from North America and 8 of 13 from Asia Pacific) received a D or E grade, and none were graded higher than B (Figure 3).

European managers led the way on most responsible investment issues considered in our survey. The top 10 scores in each of the governance, stewardship, and climate sections were all by European managers, and only one non-European manager (PGIM Fixed Income) finished in the top 10 on biodiversity. On climate in particular, European managers comprised the top 17, and 26 of the top 29 scores. On social issues, the best performers were more diverse, but European managers still outperformed their peers on average.

Nevertheless, several European asset managers performed poorly in all areas of our survey, with four rated D and two – Anima and Vontobel AM – rated E and in the bottom 10 managers overall.

On average, British, Dutch, and French asset managers show particularly strong performance on stewardship relative to other regions. French asset managers also scored well on social issues. Meanwhile, Swiss and German asset managers show weaker performance on average on biodiversity than the rest of Europe.

The European regulatory environment is likely having a positive impact on the responsible investment performance of European asset managers relative to other regions. This is discussed further in our recommendations to policy makers.

North American managers generally performed poorly, with 10 receiving a D grade and three – Mellon IC, Fidelity Investments and Vanguard – graded E. The highest-placed North American firm overall was New York Life Investments, in 11th place, followed by J.P. Morgan AM (13th) and T. Rowe Price (18th). These were the only three of 25 North American managers that achieved a B grade.

US asset managers showed notably weak performance on climate, with only three finishing in the top 30 for that section. Yet North American asset managers have a crucial role to play in responding to the climate crisis because of their outsized influence: they represent more than three-fifths of the total assets under management in this study, despite making up fewer than a third of the managers surveyed.

On other topics, North American managers’ performance was more mixed compared with other regions, although generally behind Europe and ahead of Asia Pacific. New York Life Investments, PGIM Fixed Income, and T. Rowe Price each demonstrated particularly strong performance on social issues, with New York Life achieving the highest score across all managers for that section.

Collectively, Asia Pacific asset managers demonstrated weaker performance than their European and North American peers. Nomura AM was the highest, ranked 24th and graded CCC, and Asset Management One was the only other Asian manager in the top half, ranked 35th and graded CC. However, there were some pockets of good performance in individual sections – particularly on biodiversity, with Asset Management One, Nomura AM, Ping An AM, and Sumitomo Mitsui Trust all placing in the top 20 managers for that section.

The average Japanese asset managers’ scores were similar to the overall averages for each section. The Chinese asset managers generally demonstrated much weaker approaches to stewardship, climate, biodiversity, and social issues. This difference is likely to be at least partially due to the fact that some Chinese managers provide limited public disclosures about their policies. Promisingly, 2022 saw the Chinese government issue voluntary standardised disclosure practices on responsible investment[i] as well as specifying green finance and responsible investment-related requirements for banks and insurers[ii]. These changes came into effect following data collection for this survey so they are not reflected in this year’s ranking.

[i] Lee, S. T. T. (16 August 2022). "China unveils ESG reporting guidelines to catch peers". Bloomberg Professional Services. Available online at: https://www.bloomberg.com/professional/blog/china-unveils-esg-reporting-guidelines-to-catch-peers/.

[ii] Liu, J. (19 October 2022). "China raises the bar on investor regulations to promote green finance". PRI. Available online at: https://www.unpri.org/pri-blog/china-raises-the-bar-on-investor-regulations-to-promote-green-finance/10659.article.

All links accessed January 2023.